Benefits of Making Business in Macau | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN MACAU WWW.MERGERSCORP.COM

2. At MergersCorp M&A International we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction. It is our goal to make the process of either buying a new business or selling your current business as smooth and efficient as possible. We know how important confidentiality is to our sellers and we treat it with the utmost importance. WWW.MERGERSCORP.COM

3. BENEFITS OF MAKING BUSINESS IN MACAU WWW.MERGERSCORP.COM

4. Country Overview Macau is an autonomous region on the south coast of China, across the Pearl River Delta from Hong Kong. A Portuguese territory until 1999, it reflects a mix of cultural influences. Its giant casinos and malls on the Cotai Strip, which joins the islands of Taipa and Coloane, have earned it the nickname, "Las Vegas of Asia." One of its more striking landmarks is the tall Macau Tower, with sweeping city views. Nearly all of the population, of which a great majority lives on Macau Peninsula, is ethnic Chinese, born on either the mainland or Macau. There are also small groups of other Asians (including people of mixed Chinese and Portuguese ancestry, often called Macanese). However, the once-significant Portuguese minority has been reduced to only a small proportion of the population.

5. Executive Summary Macau, located in Southeast Asia, is bordered by China to the north and west and by the South China Sea to the south and east. The official languages of Macau are Chinese and Portuguese, and the currency is the Macanese pataca (MOP). Macau pursues an open economic policy despite having a relatively small economy. Macau is a free port and has no foreign exchange controls, and the procedures for approval of investments by foreigners are the same as for local residents. The Macanese pataca is closely linked to the Hong Kong dollar (HKD), which is also accepted in Macau. Macau became a member of the World Trade Organization (WTO) on 1 January 1995.

6. Introduction – Doing business in Macau Macau has a booming economy, thanks largely in part to its huge gaming sector. A booming economy means a high level of tourism. And for businesses, it is all about opportunities for expansion where the flourishing economy is at. Macau is still a well kept secret as an investment destination. It is one of the freest economies of the World, with a tax rate of as low as 12% (individuals and companies), being very attractive to set up investment companies, as it has not the costs of the sister Special Administrative Region of Hong Kong. The low tax rate and free trade economic system are just some of the many reasons why investors would want to consider starting something in Macau.

7. Conducting business in Macau company formation in Macau. ... •Company by an individual quota (“Sociedade Unipessoal Limitada”) ... •Macau Holdings Limited Company (“S.A.”) Foreign investors who wish to set up a business in Macau can do so on the condition that they take on a local partner as a shareholder. If a foreign investor wishes to be the sole owner of the business, then the investor can only open a branch of the business in Macau, not start it up from scratch. There are three major types of company registration in Macau: •Company by Quotas (“Lda.”): This is the most common type of

8. Taxation in Macau According to the Macau Complementary Tax Law, complementary tax is imposed on a progressive rate scale ranging from 3% to 9% for taxable profits below or equal to MOP 300,000 and 12% for taxable profits over MOP 300,000. Taxable profits below MOP 32,000 are exempt from tax. The Personal Income Tax Rate in Macau stands at 12%. The Corporate Tax Rate in Macau stands at 12%.

9. Trade Macau is the 140th largest export economy in the world. In 2017, Macau exported $1.33B and imported $9.7B, resulting in a negative trade balance of $8.4B. In 2017 the GDP of Macau was $50.4B and its GDP per capita was $115k. The top exports of Macau are Jewellery ($202M), Precious Metal Watches ($194M), Copper Foil ($56.1M), Rolled Tobacco ($45.7M) and Trunks and Cases ($35.8M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Jewellery ($597M), Precious Metal Watches ($456M), Trunks and Cases ($449M), Broadcasting Equipment ($421M) and Beauty Products ($407M).

10. Banking in Macau Macau has 27 licensed banks out of them, four headquartered are in the Macau SAR. The local banking sector of Macau is offering extensive financial support to several sections of the community and at the same time, it is also contributing towards its overall development of infrastructure. Some of the top banks are: China Construction Bank (Macau) Corporation Limited - Banco de Construçao da China (Macau), S.A. Industrial and Commercial Bank of China (Macau) - Banco Industrial e Comércial da China (Macau), S.A. Luso International Banking Limited - Banco Luso Internacional, S.A.

11. Our M&A Process NEGOTIATION & CLOSE POST MERGER INTEGRATION (PMI) INTEGRATION (PMI) POST MERGER TARGET APPRAISAL APPROACH DUE DILIGENCE Key Areas  Target & market analysis;  Initial assessment of synergies & value drivers;  Indicative valuation;  Go or No-Go decision;  Preparation of transaction documents (NDA – Non- disclosure Agreement/LOI- Letter of Intent);  Select Transaction team;  Appoint advisors;  Consider funding ability.  Initial approach letter;  Signing of NDA;  Prepare & share initial information requests;  Formulation of LOI (Letter of Intent) & possible negotiations;  Initial meeting and Q&A;  Circulate information on the Target to the Transaction team.  Set scope of due diligence;  Set up VDR (virtual data room);  Coordinating of due diligence, further meetings and Q&A sessions;  Consider points relevant to the Post-Merger (PMI) phase;  Revisit indicative valuation & prepare detailed valuation based on due diligence findings;  SPA negotiations with the seller;  Development of final structure (share/asset deal) and final valuation;  Approvals;  Signing of SPA & Close.  Consider the extent of integration;  Development of 100 Day PMI Plan;  Consider short & long term objectives;  Estimate requirements to capture synergies;  Determine resource needs & optimal allocation. Parties Involved  CFO;  Head of M&A;  Accountants;  Corporate finance advisors;  Consultants.  Senior management;  CEO, CFO, CTO;  Strategy director;  Head of M&A;  Head of Business Development;  Consultants.  Company general counsel;  Lawyers;  Senior management.  Company general counsel;  Lawyers;  Senior management/HR. 11 © Midaxo 2018 www.midaxo.com

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13. MergersCorp.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Member firms of the MergersCorp network of independent firms are affiliated with MergersCorp International. MergersCorp International provides no client services. No member firm has any authority to obligate or bind MergersCorp International or any other member firm vis-à-vis third parties, nor does MergersCorp International have any such authority to obligate or bind any member firm. Copyright © 2020 MergersCorp International. All rights reserved. 13 © Midaxo 2018 www.midaxo.com